Europe stocks rise after French debt sale

Auto-sector shares gain after Goldman Sachs upgrades

By

PolyaLesova

LONDON (MarketWatch) — European stock markets rose on Monday, as the French government successfully sold Treasury bills and investors shrugged off last week’s news that Standard & Poor’s downgraded the credit ratings of nine euro-zone nations, including France, Italy and Spain.

The pan-European Stoxx 600 index (SXXP) gained 0.8% to end at 251.12 after spending most of the session swinging between small gains and losses.

U.S. markets are closed Monday for Martin Luther King Jr. Day.

Ratings company Standard & Poor’s downgraded the credit ratings of nine euro-zone nations — including France, Austria, Italy and Spain — late Friday after the close of European markets. France, which was stripped of its prized triple-A credit rating, sold Treasury bills on Monday, with borrowing costs declining from levels seen a week ago.

European stocks finished marginally lower on Friday, showing minimal reaction to speculation about the impending downgrades, which had been expected by investors in recent weeks.

On Monday, European stocks climbed.

“Last week’s bad news is having little impact on the U.K. and European equity markets,” said Mike Lenhoff, chief strategist at Brewin Dolphin.

“This might be because the bad news was mostly discounted,” he said in a note. Or it might be because Wall Street is closed on Monday and investors are waiting for U.S. earnings news, he added. “If earnings prove to be at least as good as expected and maybe a touch better, Wall Street can be expected to lead equity markets up,” Lenhoff said.

S&P lowers France's credit rating

(4:42)

S&P put France on notice on Friday it intends to lower the country's cherished AAA credit rating. Thorold Barker and Francesco Guerrera visit Mean Street to discuss the impact on France and the euro zone.

Carnival shares sink

The biggest loser in the FTSE 100 was cruise firm Carnival PLC (CCL)
CUK, +4.04%CCL, +2.72%
Its shares sank nearly 17% in London, after the company’s Costa Concordia ship ran aground off the coast of Italy on Friday, resulting in the deaths of at least five people.

Carnival, whose shares are traded both in London and New York, said on Monday that the disaster will cost the company between $85 million and $95 million in lost earnings. The company also expects other costs to the business that it said it can’t determine at this time. Morgan Stanley downgraded Carnival to equal weight from overweight Monday and cut its earnings estimates for the company. Read more about Carnival.

Another big decliner in Europe was Lundin Petroleum AB (LUPE). Its shares fell 14.3% on Monday in Stockholm after the Swedish oil and gas firm said that oil resources at its Avaldsnes discovery off the coast of Norway may be lower than first estimated.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.